Eco Recycling's Stock Upgrade to 'Buy' Attracts Investor Attention with Impressive Growth and Returns

Eco Recycling, a smallcap company in the trading industry, has recently caught the attention of investors as MarketsMOJO has upgraded its stock call to 'Buy' on September 18, 2024.
The company has been delivering outstanding results, with a growth in net profit of 393.94% in the last quarter of June 2024. This positive trend has been consistent for the past 5 quarters, with the company reporting the highest net sales and PBDIT in the last quarter. Additionally, the company's ROCE (HY) is at an impressive 31.85%, indicating strong returns on capital.

Technically, the stock is in a bullish range and has shown improvement in its trend from mildly bullish to bullish on September 18, 2024. Multiple factors such as MACD, KST, and OBV are also indicating a bullish trend for the stock.

Eco Recycling has also been delivering consistent returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods. In the last 1 year alone, the stock has generated a remarkable return of 416.20%.

However, there are some risks associated with investing in Eco Recycling. The company has a high debt to EBITDA ratio of 4.83 times, which may affect its ability to service debt. Additionally, its return on capital employed (avg) is at a low 3.61%, indicating low profitability per unit of total capital.

Moreover, the company's long-term growth may be a concern as its net sales have only grown at an annual rate of 19.04% over the last 5 years. The stock is also trading at a premium compared to its historical valuations, with a price to book value of 29.7 and a PEG ratio of 0.5.

It is also worth noting that despite its smallcap size, domestic mutual funds hold only 0% of the company, which may indicate a lack of confidence in the stock or the business.

In conclusion, while Eco Recycling has shown impressive growth and consistent returns, investors should carefully consider the risks associated with the company before making any investment decisions.